Dear BHVA Residents,

Financial budgeting at BHVA is the process of estimating and planning BHVA expenses and income for a calendar year. The budget quantifies BHVA plans in financial terms, including the allocation of financial resources and identifying available cash flows for required spending. It is the tool that allows us to plan for short-term and long-term expenses. The Board is required to approve a budget each year. The Board reviews actuals versus plan for each operating month and posts monthly financials on BristolHarbourVillage.org .

The Budgeting Process

The Board works with the Management Company to project expenses for the budget year. Factors considered in the budget process include:

- current year spend

- macroeconomic themes in the greater Rochester area and nationally, like interest rates, labor supply, construction costs, etc.

- climate change, like do we feel BHVA will require more plowing over the winter season or anticipate a higher number of trees damaged by storms

- existing contracts where commitments to pay will fall within the budget year

- maintenance needs

- capital improvements

- litigation

- governance items, such as the update to the Declaration.

The Board agrees on the forecasted spend for operating expenses (Administrative, Utilities, Payroll/Benefits, Contracted Services, Supplies and Maintenance Projects. The Board identifies reserves that will be required for legal and maintenance purposes. The forecasted operating expense plus the reserve amount is compared to current income sources (such as the monthly assessment, community center rental, interest income) to identify whether there is sufficient revenue to cover operating expenses and to fund the required reserves.

The Board has the authority to approve increases to the monthly assessment and is required to share the approved budget with the community and to provide 30 days notice before effectuating the related increase.  

When income is insufficient to cover needed investments, the Board considers increases to the monthly assessment and the potential for a special assessment. For the 2023 Budget, the Board approved a 20% increase to the monthly assessment to cover increases to expenses and allocate a portion of the increase to maintenance reserves. The result is that BHVA can anticipate a gradual increase to the maintenance fund over 2023. However the amount is insufficient to fund needed investments in 2023, hence there is a funding gap.  

The gap equates to the $1700 Special Assessment the Board proposed to the community and for which the community provided the Board with feedback and suggestions to consider.  It would have been unreasonable for the Board to propose a $180 increase to the monthly assessment in 2023 to cover one time expenses.  

The Board must ensure that sufficient cash is available to make payments on contractually defined schedules, like the $253,400 payment for the Pedestrian Bridge, which is due in April 2023, and the $140,000 payment for the Beach Stairs that is to be paid in 3 installments in May, June and July 2023.

The Declaration requires the Board to meet with the community to discuss proposed Special Assessments, which the Board has done. The Board met recently to consider the community's feedback to explore options to reduce the Special Assessment amount. The Board will review the project Cash Flow for 2023 before voting on how the funding gap will be addressed. 

Kind regards,

Your BHVA BOD